WELCOME TO CHICO S FAS 2014 ANALYST EVENT

Transcription

1 WELCOME TO CHICO S FAS 2014 ANALYST EVENT

2 Safe Harbor Statement Our discussion this morning includes forwardlooking statements which are subject to and protected by the Safe Harbor statement. These forward looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially. The company does not undertake to publicly update or revise its forwardlooking statements, even if experience or future changes make it clear that projected results, expressed, or implied by such statements, will not be realized.

3 Chico s FAS Management Dave Dyer, CEO Cinny Murray, Chico s Brand President Donna Noce, White House Black Market s Brand President Todd Vogensen, CFO Jeff Gaul, SVP Real Estate Bill Bine, VP International Operations

4 Agenda Prepared Remarks Dave Dyer, Cinny Murray, Donna Noce, Todd Vogensen Opportunity for Q&A Depart for Yorkdale WH BM Refreshment station / Boxed lunch Yorkdale WH BM tour Jeff Gaul presents on bus ride from Yorkdale to Square One Square One Chico s tour Depart for Airport

5 Chico s FAS Well Positioned for Long-term Loyal Customer Base Omni-channel Capabilities Merchandise Extensions

6 Analyst Meeting September 2014 Dave Dyer, CEO

7 Chico s FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 35 years and older.

8 Chico s FAS FY 2014 YTD Financial Performance

9 Chico s FAS Omni-channel

10 Phases of Omni-channel Investment 1. Infrastructure 2. Store Technology 3. Customer Engagement

11 Infrastructure

12 Infrastructure

13 Store Technology

14 Store Technology Cash Wrap Point of Sale

15 Store Technology ipad Customer Book Application

16 Store Technology Tech Table

17 Store Technology Digital Signage

18 Customer Engagement

19 Customer Engagement

20 Customer Engagement

21 Customer Engagement

22 Customer Engagement

23 Analyst Meeting September 2014 As of: 9/12/2014 1:29 PM Cinny Murray Chico s Brand President

24 Opening Good morning: Today I am going to cover 3 key points: 1. Update on our business YTD. 2. Share my thoughts on the changing landscape for an apparel shopper. 3. Growth plans for the Chico's Brand. 1

25 Our Mission Chico's celebrates women who love to express their unique style, and inspires them to feel confident and beautiful through exceptional personal service and expert style advice. 2

26 Our Business 2014 Results: Flat comp Profitable business model that generates strong cash flow Customer browse space shifted Future Growth Strategies Product launches Coordinated future touch points between digital, stores and tablets International 3

27 New Category: Retreat Extension to Zenergy franchise Spring 2014 launched 229 stores Fall 2014 in 478 stores Addresses customer lifestyle shift 4

28 New Category: Shoes Online initiative Testing in 25 boutiques Fall 2014 Future growth from ipad selling 5

29 New Category: Golf Extension to Zenergy franchise 400 stores Completed first tournament sponsorship, Patty Berg Memorial Leverage TV for new customer acquisition 6

30 New Category: Swim Online initiative Swim 80% Cover-ups 20% Future growth from ipad selling 7

31 New Category: Petites Online initiative Offered in 18% of missy styles Strength is in bottoms Testing in Canada 8

32 New Category: The Knit Kit Introduced in all boutiques Spring 2014 Addressed options for working customers Will be expanded in Spring

33 What s Working: Pants Growing So Slimming Franchise Expanded to So Lifting, currently in both pants and denim Two TV spots for 2014 Legging Knit pants 10

34 Our Marketing - Pants 11

35 Our Marketing - Leggings Needs Update 12

36 What s Working: Woven Tops Strongest Spring business Double-digit comp Driven by Basics Fashion Print 13

37 What s Working: Knit Tops Strong Spring 2014 business Drove mid-single digit comp Working Prints Fashion Updated basics 14

38 Key Initiative For Fall: Jackets Focus: Fall 2014 Statement Jackets Pieced Duster Print Vests 15

39 Our Marketing Statement Jackets Needs Update 16

40 Key Initiative For Fall: Sweaters Key category for Fall Focus Novelty Fashion Gift giving 17

41 Chico s Customer Performance Customer file is at an all time high Growth is being generated in all customer segments Existing customers high-single digit Reactivated high-single digit New mid-single digit Chico s customers remain the most loyal and engaged in the industry Retention rate industry leading Outside research results showed we are an industry leader Coordinated efforts between selling channels and ipad to strengthen customer relationships and drive sales 18

42 Our Marketing Customer Referrals Outreach Events/ Launches Direct Mail Public Relations Advertising Social 360 approach Customer strategy Targeted and customized communication Data and analytics play a major role Increase digital/social investment Expand brand awareness though TV, which now includes Hispanic and golf Strengthen lifestyle connection through travel Established initiatives to increase outreach and localization efforts 19

43 Our Operational Focus: ipad Convert paper customer books to digital format Drive incremental appointment sales and ADS by expanding associates visibility of customer s category of loyalty Drive incremental volume by introducing the full breadth of assortment on Chicos.com Utilize Chicos.com to personalize the sale through use of web features such as ratings and reviews, product videos and on-figure photos Utilize Gmail to build customer relationships and support personalization 20

44 Our Operational Focus: ipad 21

45 International: Mexico Shop in Shop Screen Shot Store Details: 2 stores 6 shop in shops Mexico City and Villahermosa New store design Boutique 22 23

46 International: Ontario Store Openings: Square One: August 22 Upper Canada: August 26 Mapleview: August 29 Launch Outlets: March

47 Closing 24

48 Inspires women to embrace femininity as a source of strength Analyst Meeting September 2014 Donna Noce, WH BM Brand President

49 WH BM Brand Growth WH BM Sales have grown at a 4 year compound annual growth rate (CAGR) of 13%, driven by strong growth across all channels (Comp Sales CAGR +7%) Growth has been fueled by 3 primary levers: 1) Comp store growth through new business franchises: Workkit (2012), Instantly Slimming (2013), Perfect Form (2013) 2) Omni channel growth fueled through new customer acquisition and online exclusives 3) Store Openings (131 total: 93 Frontline, 38 Outlet) $811M $859M $697M $591M

50 2014 & Beyond WH BM continues to focus on growth as we move into the Fall season 2014 YTD Performance Recap: WHBM comps have been pressured, but improved Q1 into Q2 Re-launch of Loyalty program has been well received by our customer; wins include migration into top tier, retention rates holding steady, and improved new customer assimilation Customer file is at an all time high and retention and reactivation rates have been increasing Brand Goals: Attract new customers through expanded lifestyle offerings and relevant marketing and promotional cadence Retain loyal customers and increase the share of wallet Focus on the Omni customer experience International growth

51 Merchandise Initiatives Merchandise focus will be on a more diversified price architecture, continued expansion of lifestyle, and innovative franchises

52 Diversifying Price Architecture Our expanding breadth of lifestyle has allowed us to reach a broader customer base leading to a more diversified price architecture Spring 2014 was underpenetrated in the entry and mid tier price points. The brand is positioned with a balanced mix of good, better, best and lux Lux Lux Price Point is our highest price point focused on delivering couture / aspirational collections Best Best Price Point delivers couture like details at our historic price point Better Better Price Point is our mid tier price point focused on delivering unique details at a great value Good Good Price Point is our entry price point focused on delivering key foundational categories at an amazing value

53 Lifestyle Evolution Occasion Destination Polished Casual Sportswear Introduction Launch of WorkKit Introduction of Proprietary Franchises: Perfect Form Instantly Slimming Expand Portfolio of Brand Franchises: St Honore Denim Iconic Collection Genius Dress

54 Lifestyle Evolution WHBM has migrated from an occasion destination in 2010 to a multi-channel, multi faceted, international lifestyle brand

55 Workkit Launched in 2012 Now the most recognized brand franchise Diversified product assortment that is relevant from the classroom to the boardroom

56 New Dresses Omni channel effort to gain market share and become the go to destination for dresses Online exclusives offer her 65% more options from casual to formal occasion Diversified the assortment with range of price points and lifestyle options Innovative Technology (Genius & Instantly Slimming)

57 New Dresses

58 St Honore - Denim Launched the new franchise in Spring 2014 Highly successful launch and continuing success into Fall New fabrics, washes, and details Expanded fashion silhouettes Diverse price architecture starting at $78

59 Iconic Collection Launched Fall 2014 Strong branding franchises Both categories showing strong positive comp growth

60 Iconic Collection Video

61 Iconic Collection Video

62 Legging Studio Fall 2014 Campaign Reinforces the breadth of lifestyle and captures the long over lean trend of the fall season

63 Leggings Studio Video

64 Outerwear Fashion inner/outerwear assortment Range of lifestyles and price points New & Growing business Category builds into Q4 Expanded in line assortment

65 Shoes & Accessories Elevating the details and quality Focused on collections that complete the outfit Fall investment in expanded boot assortment Online exclusives

66 Petites Launched small assortment of work in Spring expanded the offering to 40% of the collection Highly successful in acquiring new customers Continuing to grow assortment in 2015

67 Our Customer The customer file is at an all time high, growing by ~50% over the last 4 years Customer growth is being generated in all customer segments, with material YTD gains in our most valuable segments The re-launch of the WH BM loyalty program is driving increased engagement and spend in our best customer segment We continue to leverage our data in new ways to refine our targeting and communication with the end goal of increasing our relevancy The importance of our multi channel customer continues to increase as we strive to deliver a seamless customer experience irrespective of how, when, or where she shops us

68 The Experience As technology becomes an increasingly important part of our customers life, we continue to evolve the customer experience through the enhancement of our website and advances in in-store technology

69 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL STOREFRONT

70 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL ENTRY

71 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL INTERIOR

72 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL INTERIOR

73 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL TECH WALL

74 CARARRA DESIGN - MALL AT MILLENIA - ORLANDO, FL VIP FITTING ROOM

75 The Experience Beyond technology the strength of brick and mortar continues to evolve Relevance to geographic location, local communities, and the customer preference. RESORT CONCEPT - SANTA MONICA, CA STOREFRONT

76 RESORT CONCEPT - SANTA MONICA, CA INTERIOR

77 RESORT CONCEPT - SANTA MONICA, CA INTERIOR

78 Marketing The WH BM marketing approach is evolving to break through the every day clutter, reaching our customer in a more relevant and targeted way Direct Mail segmentation to speak to our customers in the most effective manner possible based on customer level insights gained from big data Leverage TV to drive customer awareness and engagement by highlighting the breadth of our assortment and the launch of new collections: Testing regional intensification Testing Hispanic television Digital marketing and social media continues to increase in importance and our penetration of spend continues to increase accordingly Migrate single channel customers to multi channel customers

79 International WH BM International performance continues to exceed our expectations as we look to expand our store base beyond the Toronto market Brand awareness has been strong with many of the customers having shopped the brand previously, and we are generating new customer growth as well with 2/3rds of customers new to the file. Product offering has been well received with strong parallels to the customer shopping patterns experienced in the US We are very proud to bring our Award winning store design to the Canadian market

80 Wrap Up WH BM is well positioned to gain increasing market share as we focus on delivering: Incremental new customers through expanding and balancing the price architecture and launching new collections that serve her different lifestyle needs Increased loyalty and share of wallet for our existing and best customer segments A seamless and relevant omni channel approach that surpasses our customers needs/expectations International Growth

81 Analyst Meeting September 2014 Todd Vogensen, CFO

82 Three Things 1. Our Customers 2. Our Use of Cash 3. Return To Double-Digit Operating Income

83 Customers % CAGR

84 Social Interactions Facebook fans 2.9 million Twitter followers Up +200% Pinterest Most widely utilized social sharing button

85 Cross-Channel Purchasing Average Annual Spend Per Customer 5X 2.5X Online-Only Store-Only Multi-Channel

86 Boomer Consumer 12,000 US Female Population (in 000 s) 11,000 10,000 9,000 8, ,000 6,000 5, = 31M 2020 = 31M 2010 = 52M 2020 = 52M 2010 = 37M 2020 = 42M 2020 E* 4, ' Age Source: US Census Bureau 86

87 Balance Sheet Health No Debt Over $208 Million In Cash

88 Investment Philosophy Long-term growth is the priority Capital expenditures in-line with depreciation Invest in Omni-channel Moderated store openings Return excess cash to shareholders

89 Dividends and Share Repurchases Remaining Authorized Repurchases $290 million Repurchases $567 million Dividends $145 million Since 2010 $712 million Over 117% of free cash flow

90 Path to Double-Digit Operating Income % 10% % % 6.6% R12 Q2'14 Gross Margin SG&A Growth Brands Double Digit +

91 Chico s FAS Well Positioned for Long-term Loyal Customer Base Omni-channel Capabilities Merchandise Extensions

92 Questions